In developing accounting standards, the FASB attempts to determine that each proposed pronouncement will fill a significant need and that the costs imposed to meet the rule are justified in relation to overall benefits of the resulting information. What accounting assumption, principle, or constraint is being illustrated?

Question

Business

Ayanna Guerra

6 January, 17:12

In developing accounting standards, the FASB attempts to determine that each proposed pronouncement will fill a significant need and that the costs imposed to meet the rule are justified in relation to overall benefits of the resulting information. What accounting assumption, principle, or constraint is being illustrated?

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Answers (1)

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Keyon Schultz · Answer 1

cost benefit principle.

Explanation:

The cost in incurring the necessary procedure and calcuation to obtain the information will be lower than the benefit that will derive from his use.

It need to justifies the cost with an information useful enough to change the decision making of the company by having it.